Visa, Mastercard prepare to raise credit-card fees

Visa, Mastercard prepare to raise credit-card fees:

The fee increases—delayed during the past two years because of the pandemic—are scheduled to kick in next month, according to people familiar with the matter.

The increases, delayed during the pandemic, mean many merchants will pay more when shoppers use credit cards

Visa Inc. and Mastercard Inc. are preparing to increase the fees that many large merchants pay when they accept consumers’ credit cards.

The fee increases—delayed during the past two years because of the pandemic—are scheduled to kick in next month, according to people familiar with the matter and a document viewed by The Wall Street Journal.

Interchange fees account for most of the increase. Merchants pay these fees, which are set by the card networks, when shoppers use their cards. The fees go to the bank that issued the card.

Though invisible to shoppers, interchange fees are a constant source of aggravation for merchants. Their interchange costs have ballooned in recent years along with the popularity of rewards credit cards, which typically carry higher fees to cover.

More merchants have started charging consumers extra when they pay with credit cards, according to the report. The ability to accept card payments helped businesses push through the pandemic, Visa and Mastercard said.

The Visa and Mastercard fee increases will apply to many online consumer credit-card purchases, according to the document and people familiar with the matter.

Mastercard will also increase fees on more than a dozen in-store purchase categories, according to the document and people familiar with the matter. Small and midsize supermarkets will pay higher interchange fees on most rewards cards. In-store general retail fees will also rise.